Updated: September 29, 2020 1:48:00 pm
The NYT found that Trump, despite enjoying the lifestyle of a billionaire, did not pay federal income taxes in 11 of the 18 years the newspaper examined. (File photo / AP)
The New York Times has obtained tax information from the President of the United States, Donald Trump, spanning over two decades, “revealing distressed properties, large write-offs, an audit battle and hundreds of millions of overdue debts.”
The NYT report says Trump paid just $ 750 a year in federal income tax in the first two years of his presidency (2016 and 2017). That is a little over 50,000 rupees a year. It has also revealed that it managed to evade paying any income tax in 10 of the previous 15 years.
Trump’s tax payments were a hot topic when he ran for president in 2016. Yet he has successfully avoided revealing his tax details, a first for any US president, even after he became president.
Ahead of the Nov. 3 election, Trump is seeking re-election, his tax records have become arguably the most sought-after documents in recent times.
What is the scale of tax evasion?
By NYT calculations, over the past two decades, Trump has paid about $ 400 million less in combined federal income taxes than a very wealthy person who paid the average 0.001% of the highest income taxpayers in the US. While the tax rates applicable to the wealthiest Americans have decreased over the decades, and the wealthy exploit various “loopholes” to reduce their liabilities, the NYT notes that “most wealthy people still pay a large amount of federal income taxes. “
The NYT found that Trump, despite enjoying the lifestyle of a billionaire, did not pay federal income taxes in 11 of the 18 years the newspaper examined. Trump is the richest president of the United States in history, but his income tax payment is lower than that of some of his more recent predecessors, such as George W Bush (200-09) and Barack Obama (2009-17 ), who routinely paid federal income taxes in excess of $ 100,000 a year, roughly 140 times what Trump paid.
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How did Trump manage to do it?
You appear to have used various ways to reduce your tax liability or to obtain a refund of taxes paid. To reduce his liability, he allegedly did the following:
Classifying personal expenses as the cost of business: Doing so reduces taxable income. Trump has categorized everything from his residence to his golf course to his plane as business expenses. Even his hairdressing expenses, $ 70,000 (approximately 50 lakh), as well as those of his daughter Ivanka Trump, $ 100,000 (approximately Rs 70 lakh), have been shown as business expenses, The NYT said.
The NYT said the treatment of Seven Springs, Trump’s New York property, “typifies his aggressive definition of business spending.” The 200-plus-acre estate, purchased in 1996, is openly called “a Trump family retreat,” however, for tax purposes, it is an “investment property” and not a personal residence. As a result, Trump “has been able to write off $ 2.2 million in property taxes since 2014,” the NYT wrote.
Pay high consultation fees: The NYT found that on almost all of its projects, Trump’s companies set aside about 20% of revenue for unexplained “consulting fees.” For example, when he cashed in $ 5 million on a hotel deal in Azerbaijan, he reported that he paid $ 1.1 million in consulting fees, which reduced the final profit before being taxed.
Furthermore, according to the report, this fee is charged by Ivanka or an organization that he runs.
Show Big Loss Businesses: Some of Trump’s biggest business ventures make big losses on paper. For example, its golf courses, the center of its business empire, have lost more than $ 315 million (more than Rs 2 billion) in the past two decades.
“The Trump Organization, a collection of more than 500 entities, virtually all wholly owned by Trump, has used the losses to offset the rich profits from the Trump brand license and other profitable parts of its business,” The NYT wrote. .
What about refunds?
Trump sought massive refunds. As a result, while he paid nearly $ 95 million in taxes over the 18 years, he was able to “recoup most of that money, with interest, by requesting and receiving a tax refund of $ 72.9 million, as of 2010” . This refund is the subject of a long battle with the tax authorities.
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